Merrill Stresses a “Commercial Imperative” for Brokers to Diversify Client Roster
Merrill Lynch Wealth Management is pushing brokers to recognize “the commercial imperative that exists” to diversify their client rosters, Jennifer Auerbach-Rodriguez, the firm’s strategic growth markets executive, told AdvisorHub.
“This is information that the industry, as a whole, can benefit from having and using,” Auerbach-Rodriguez said, noting it would make advisors “aware of the changing demographics and wealth in our country.”
Merrill executives declined to provide statistics on what portion of the wirehouse’s client base falls into those three demographic categories.
The survey, which was conducted between September and November 2019, queried 450 members of households with more than $100,000 in investable assets, from each category of the three identified demographic groups and compared those to survey results from 1,000 members of similar households in the general population.
Merrill is not, however, changing its account minimums to work with a full-fledged advisor, Auerbach-Rodriguez said. Merrill brokers are not paid on accounts under $250,000, a common complaint by brokers who say they’re not rewarded for working with some in early stages of wealth creation.
Auerbach-Rodriguez said those prospective clients would be candidates for its self-directed platform, MerrillEdge.
It also will not be making any related changes to broker compensation, such as adding bonuses based on a more diverse client roster, Auerbach-Rodriguez said.
Auerbach-Rodriguez and other Merrill executives, some of whom spoke at a separate call introducing the surveys to reporters, said part of the reason in issuing the survey was to address pre-existing attitudes about diverse populations’ relationship with wealth creation and management.
“There is a tendency to ignore or reject new information that does not support our worldviews,” the report says. “We encourage readers of this paper to keep this in mind as they explore the data and stories shared.”
Merrill wants brokers to approach the reports with “an open lens,” Shelley Saraniti, Merrill’s West Division Financial Advisor Development Program Performance executive, and a representative of the LGBTQ-plus community, told reporters on Monday.
The prospecting push correlates with efforts to improve diversity among its core brokerage force of which 21% of its roughly 17,500 brokers and branch-based advisors were women and almost 14% were Black/African-American or Latino/Hispanic.
In the past 18 months, 54% of Merrill’s new broker hires have been diverse, Merrill Chief Operating Officer Kirstin Hill told reporters.
That is also helping brokers attract more diverse clients, Auerbach-Rodriguez said. The diverse advisors engage in peer coaching, which helps other brokers attract clients from diverse communities, she said.
To help its advisors prospect, the firm is also distributing this week pre-recorded video seminars for brokers to customize for diverse clients.
The seminars will feature Merrill executives who represent Black/African-American, Hispanic/Latino, and LGBTQ-plus communities, including Craig Young, who is Black and leads Merrill’s national business development. The executives on the videos will present statistical and qualitative findings about wealth-accumulation paths, objectives, and challenges specific to each of those three demographic groups, Auerbach-Rodriguez said.
Wirehouses have been frequent targets of diversity-related lawsuits. In July, two former Merrill Lynch financial advisors, who are African-American, filed a proposed class action race bias lawsuit against the wirehouse that echoes claims made more than a decade ago in a $160 million settlement.